C150190 Approval Letter 2

• Contract/PO #: C150190
• Contractor Name: Beaver Reservoir Company
• Contract Type: Loan
• Water District: 59
• County: Gunnison
• Loan Projects - Doc Type: Approval Letter

Beaver Creek Reservoir Company
. November 9, 2004 (Revised November 24,2004)
Page 3 of4

Agenda Item 14a

solution was cost efficient and would allows the work to be performed when the reservoir is empty
and completed before the winter weather hampers construction, allowing the reservoir to operate,
uninterrupted, in its intended manner of storing water for release during the irrigation season.

Total Project cost estimate is:

1.
2.

Planning/Permitting/Engineering
Construction

TOTAL

$29.800
113.000
$142,800

The engineering design and construction-related services are provided by Golder Associates, Inc. of
Lakewood, Colorado. Construction is expected to begin in the Fall 2005.

Financial Analvsis

Table 1 shows a summary of the financial aspects of the Project for the current loan request. A
CWCB Loan of $128,500 would have an annual debt service obligation of $6,750 ($6,140 for annual
loan payment and $610 for the 10% reserve funding) for the loan terms of 2.5% for 30-years. The
total debt service obligation represents a cost of $4.17 per acre-foot for the Reservoir storage.

Table 1. Financial Summary of Project

Total Proiect Cost
CWCB Loan (90% of Total Proiect Cost)
CWCB Annual LoanPavment
CWCB Loan ObliQation (includinQ 10% debt reserve fundinQ)
Annual Assessment for Project Only (based on 1600 shares)
Annual Project Cost per acre-foot adjudicated (based on 1620AF)

.

Current Loan
Request
$142,800
$128,500
$6.140
$6,750
$4. 221share
$4.17/ac-ft

Prior cwes Loan History:
. November 1992 CWCB loan contract for $42,000 for feasibility study (0% for 30 years)
. October 1995 CWCB loan contract for $373.000 at 3% for 40 years ($343,000 project and
$30,000 existing FmHA loan)
. May 2000 CWCB loan contract amendment consolidating both loans totaling $415.000 (2.733%
for 40 years)
. November 2004 current balance on this loan is $370,573. This includes the latest loan payment
of $17,187 on October 27' 2004.

Combining the current loan request with the previous CWCB loan provides a total loan of $543.500
and an annual loan obligation (including 10% debt reserve funding) of $25,655. This equates to an
annual debt service cost of $15.84/acre-foot for this reservoir.

Creditworthiness: The Company is current with all payments to CWCB for the current loan. The
Company has no other debt. Repayment of the two loans will be accomplished by increasing share
assessments as necessary.